The Costs of Fuelling Humanitarian Aid

Summary

• Energy is essential to humanitarian action. Most refugee and internal displacement camps are in remote locations, so humanitarian agencies consume large amounts of fuel on the long-distance transport of staff, equipment, and goods such as food and water. Operations tend to rely on on-site electricity generation to power reception centres, clinics, schools, food storage, water pumping and street lighting. Peacekeeping operations face a similar situation.

• The global case load for humanitarian agencies has continued to rise throughout the last decade, but no major agency has a comprehensive strategy for addressing its energy use. Nor, despite the UN’s stated commitment to carbon neutrality by 2020, is there a concerted effort to move away from fossil fuel.

• Our survey of 21 organizations operating in the humanitarian sector in Burkina Faso, Kenya and Jordan (complemented by interviews with key staff involved in setting energy policy) finds the following problems:

– Agencies are paying too much for the energy they consume. Agencies are overwhelmingly dependent on oil fuel for electricity generation, even though renewable energy solutions are reducing costs for those deploying them in similar conditions. Wellbelow-optimum standards of efficiency in buildings, generator use and fleet management are also the norm.

– Agencies typically have few incentives to do things better. The way that fuel is distributed between agencies contracted to the UN Refugee Agency (UNHCR) in camps means that there is rarely motivation to conserve fuel, while few organizations we spoke with had any performance indicators for energy or fuel use.

– Energy spending and use lacks transparency. Few agencies collect and report on energy use. Where numbers are available, they are usually partial and unverified. Energy costs are rarely transparent in budgets; and donors do not know how much is being spent.

• In the absence of more reliable data from a greater number of agencies, any estimates of energy costs associated with complex humanitarian situations – or of the potential to effect savings – will be highly flawed. Nevertheless, drawing on our limited research and that of others in the sector, we estimate that around 5 per cent of humanitarian agencies’ expenditure goes on diesel, petrol and associated costs such as fixing generators. That would mean that the sector spent some $1.2 billion on polluting fuel in 2017.

• As the examples of best practice in this paper demonstrate, doing things differently could create large savings for individual agencies. Based on the current best-practice examples that we have observed, we estimate that the sector could save at least 10 per cent of fuel costs on ground transport, 37 per cent through behaviour change and more efficient technologies, and 60 per cent on generation – all using currently available, affordable and proven practice and technology changes. At current prices, this could mean operational savings of over $517 million a year for the humanitarian sector, roughly equal to 5 per cent of UNHCR’s funding gap for 2017.

• The potential benefits are not just financial. Adopting energy strategies that promote sustainable energy in countries of operation can help humanitarian agencies to build positive relations with host-country governments and societies. This has been the case in Jordan, where first-of-their-kind solar plants for two major refugee camps are making annual savings of $7.5 million for UNHCR, have relieved pressures on the national electricity grid and will remain a legacy asset for local communities.

• There are significant opportunities to save money and improve operational effectiveness through addressing energy practices and technology. Our research finds that:

– In Kenya, annual spending on diesel and petrol for the seven agencies surveyed was $6.7 million in 2017. The cost reflected the remote location of the camps and agencies’ overwhelming reliance on diesel for electricity generation. Replacing gensets with solar systems makes sense because of the costs of diesel, the likelihood of protracted camp situations, and the opportunities that off-grid solar would offer for extending electricity access to refugees and local populations in Garissa and Turkana counties.

– In Jordan, solar power (introduced since our survey was completed) now powers the majority of camp facilities and many households. However, the use of grid electricity by humanitarian agencies’ large head offices in Amman remains high and expensive.
Improving the energy efficiency of buildings is a priority for savings.

– In Burkina Faso’s Goudoubo camp, NGO offices are desperately short of power – they have no computers or air-conditioning. Investment in renewable forms of energy for this and other camp services such as street lighting and water pumping would enable better service provision, and could drive increased rural energy access among host populations across this area of the Sahel.

• In all three countries, transport-fuel savings and air-quality improvements through fleet sharing and fuel-management practices would make sense. For example, a fleet-sharing pilot scheme led by UNICEF in five countries demonstrated that the vehicle fleets of agencies were 10–15 per cent too big, and that the initial investment could be recouped through the scheme within one year.

• Opportunities to do things differently are routinely missed because decision-makers lack the requisite data on energy use, costs and alternatives. We make several recommendations for how humanitarian agencies, donors and host governments can open up to innovation in energy use and seize its benefits.

• As part of their commitment to ‘do no harm’, humanitarian agencies should commit to reducing their emissions footprint in host countries, and set targets for phasing out the use of diesel for electricity generation. They can begin by following a ‘3M’ strategy:

– Measuring – collecting energy and emissions data.

– Monitoring – reporting on these data and identifying ‘low-hanging fruit’ where improvements would pay back an initial investment in a short period.

– Motivating – introducing emissions reduction targets as key performance indicators and encouraging entrepreneurial activities by country teams. This could include encouraging the development of partnerships that would allow country teams to contract for renewable energy services, or that would facilitate cooperation with other agencies on fleet management and logistics efficiency

• We found that field staff often recognize the waste of resources and want to address the issue, but do not feel empowered to make change. Creating channels of communication for receiving ideas from field-office staff on how to improve energy sustainability, and working with them to integrate a culture of efficiency, would be an important step.

• To back such initiatives, donors can take a number of steps. These will often require a multiyear financing approach – in line with Core Responsibility 5 of the UN-managed Agenda for Humanity. Donors can:

a) Require humanitarian agencies to provide a breakdown of energy cost projections in budgets, backed up with assumptions about consumption and costs. This should also be clearly demarcated in reporting on actual expenditure.

b) Ask what agencies are doing to reduce their fuel costs and emissions in-country.

c) Offer support for the scaling up of pilot schemes that have already proven their feasibility (such as the fleet-sharing model or solarization of a whole refugee camp) but that require dedicated efforts and technical capacity to enable future self-financing.

d) Provide guarantees to enable performance contracts with the private sector. Or contribute to a multi-country fund that would work to de-risk large, transformative energy-related investments.

• To help agencies maximize benefits for local economies and minimize local environmental damage, governments of host countries should:

a) Ask humanitarian agencies what steps they are taking to reduce their vehicle impact and greenhouse gas emissions.

b) Include sustainable energy as a priority area in response and resilience plans. This will encourage donors to invest in energy projects that will leave a positive and sustainable legacy in the country, as is the case in Jordan.

c) In cases of prolonged displacement/humanitarian presence, consider facilitating infrastructure investments that will reduce energy and water demand in camps and harness local market expertise.

d) Consider partnerships with humanitarian agencies operating in remote locations to improve energy access for rural areas.

• The multi-stakeholder Global Plan of Action for Sustainable Energy Solutions for Situations of Displacement, which launched in July 2018, offers a potential forum through which humanitarian agencies, governments, financiers and technical experts can learn from others in the field and form collaborations to increase their energy effectiveness.